What do you need for a business credit card?

To get a business credit card, you need to be a sole trader or help run the accounts of a larger company. If your business is new or small, the lender may review your personal credit history as well as your business history (among other factors).

7 min read
small business owners

What are business credit cards? 

Business credit cards are taken out in your company’s name and are designed for business use, to pay for things like business equipment, travel expenses and invoices, for example. This can help you keep your company and personal finances separate.

If used responsibly, a business credit card can also help you build up your company’s credit score, which can boost your chances of getting finance in the future.

Business credit cards function in a similar way to personal credit cards, in that you get a set a credit limit with a minimum amount you need to pay off each month (including interest). If you pay the full balance off on time, then no interest or charges will apply. However, you may still need to pay an annual fee, especially if you have a rewards package on your card.

Bear in mind that you may be able to get a higher credit limit with a business credit card, but higher interest rates also tend to apply. Unlike personal credit cards, business credit cards don’t come with the protection of Section 75.

Who can get a business credit card? 

Business credit cards are available to:

  • sole traders
  • business owners
  • directors
  • self-employed people in a business partnership

If you’re classed as an employee for a company, you won’t be able to take out a business credit card yourself, but you could potentially be added as a cardholder by your employer, if they agree. Again, you would only be able to use the card for business purposes, not personal spending.

Can you get a business credit card without a business? 

Technically no – you need to have a business to be able to apply for a business credit card. You don’t need to be a business owner in the sense that you own a massive company with loads of employees, though. Sole traders and one-person bands can apply as well.

Remember that you’ll need to meet the lender’s requirements to get accepted for a business credit card, which can vary from one lender to the next. 

How to qualify for a business credit card 

All lenders have different requirements, but there are a few factors most lenders will consider, such as the following:

1. Name, age, address and contact details 

When you apply for a business credit card, you will need to provide: 

  • your full name and address and DOB
  • your company’s name and address
  • previous addresses over the past three years
  • contact details for both yourself and your business

You must be 18 years or older and live in the UK to be eligible. Your business must also be based in the UK.

2. When your business started trading  

The lender will want to know when your business started trading. The longer you’ve been around, the more established they will consider you to be. If your business has a long history of paying bills on time this should work in your favour.

3. Type of business and industry 

Further information you may need to provide includes the industry you operate in and what type of business you have. Your company should fit into one of these main categories: 

  • sole trader / self-employed – you keep profits as income, but pay national insurance and tax on earnings
  • partnership - between two or more self-employed people who share the profits and losses of the company
  • limited liability partnership (LLP) - like a partnership, but the partner’s liability is limited to the sum of money they invest in the company
  • limited company (LTD) – a privately run business, owned by shareholders who receive dividends. Business finances are separate to the finances of the owners 

4. Number of employees  

You need to put down how many employees you have. If it’s just you, put one. If you employ multiple people, include everybody you have on your payroll, whether they are a freelancer or a permanent member of staff.

5. Countries you trade with 

You’ll need to tell the lender which countries you trade with, whether you just operate within the UK or overseas as well. They will consider this information as part of their decision-making process.

6. Unique taxpayer reference (UTR)

You may be asked to provide your unique taxpayer reference (UTR), which is a 10-digit number found on the front page of the tax return (form SA100 or CT600). You can also find your UTR in your Personal Tax Account if you’re registered for Self Assessment with HM Revenue and Customs (HMRC). If you have an accountant, they should be able to find it for you.

7. Annual revenue  

How much revenue your company makes per year will influence how big your credit limit will be. If the lender can see that you have a large reliable income, they may be more likely to offer you a larger credit limit, as there is less chance of your falling behind with your repayments.

9. Business credit history 

The lender will do a credit check on your business. This means that they will 'hard search' your business’s credit history when you apply, which will leave a footprint and cause a temporary dip to your credit score. Remember if you pay your balance on time, every time, then your business credit score will improve.

10. Preferred credit limit 

Think about how much cash you’ll need to access and how much you can afford to repay. It isn’t a good idea to ask for a credit limit that’s higher than you need, so try and be sensible with this. You’ll also need to define what you plan to use your business credit card for, such as to free up cashflow or to make purchases.

The credit limit you are offered by the lender will depend on your company’s affordability and credit history. If your business has a good credit score, you are more likely to be offered a higher credit limit with a more competitive interest rate.

10. Personal guarantee 

It’s likely you’ll need to sign a personal guarantee if you run a small or new business with little credit history. This is a legal agreement whereby you confirm that you will pay off the credit card if your business isn’t able to do so.

Signing a personal guarantee means that how you use your business credit card will impact your own credit score. As long as you pay on time, every time, your business and personal credit score will improve.

11. Personal credit history 

The lender is likely to carry out a credit check on your personal credit history as well as your business one – especially if you run a small business and need to take out a personal guarantee. If you have a poor or thin credit history, it may be worth trying to build it up before applying, so you can access a better deal.

12. Personal income 

Your personal income may be generated by your business, but the lender will want to know how much you pay yourself. They need to know that your income is high enough to afford the repayments on your new card.

Do I need a business current account to apply? 

It may help you get accepted for a business credit card if you already have a business current account – especially if you’re applying for credit with your current provider. Some (but not all) banks require you to already have a business current account open with them.

How to find the best business credit card for you  

  • research the market – there are lots of different options, so do your research. You can look at cards on lenders’ websites or comparison sites, as well as speaking with a lender or broker directly
  • choose a card – base your decision on the fees, interest rate, and benefits you get. It would be pointless to choose a card that has business travel insurance as a perk if you don’t plan to travel much
  • use an eligibility checker – this will give you an idea of how likely you are to get accepted before you apply. It’s a good idea to do this because applying for lots of credit cards in a short space of time will damage your credit score
  • gather your information – this will help you get through the application process quicker

Disclaimer: All information and links are correct at the time of publishing.